Wednesday, November 27, 2013
BACK TO THE BEACH!
This year the National Association of Tax Professionals returned to the Boardwalk for their annual Atlantic City TAXPRO Symposium year-end tax updates. It was held at Resorts Casino Hotel.
For the past few years the classes were at the Sheraton across from the Convention Center and blocks away from the Boardwalk. The room rate was higher, it cost $10.00 per day plus tax to park (instead of the $5.00 total parking fee for my entire stay at Resorts), and had limited dining options. The only positive was the hour or so per day of free wifi provided at their computer lounge near the meeting rooms (there was no wifi available anywhere I could find at Resorts).
Although I personally do not gamble (at most $20.00 in the slots), I could never understand why an organization would hold an event in a gambling town and not stay at a gambling hotel. I learned that the reason is because the casino hotels do not consider “tax preparers” to be gamblers, and therefore do not compete for our business. I disagree – every time we sign a client’s tax return we are gambling!
The Sheraton had been chosen because it provided the least expensive (to NATP) “amenities” (i.e. continental breakfast, afternoon snack). I could understand this “inexpensiveness” during the one symposium I did attend at the Sheraton. The “continental breakfast” provided by the hotel was, at that time, the skimpiest I had ever encountered in my almost 30 years of attending tax CPE classes. However the offering from Resorts on the first day of this year’s symposium beat out Sheraton and holds the title as the worst continental breakfast ever (although it did improve a bit on the second day).
A problem with being at Resorts on Monday through Wednesday is that all of the in-house dining options are not open – limiting one’s choices for lunch and dinner. Of course the most reasonably priced of the options was one that was closed. There was no desk, and no “This Week In Atlantic City” magazine or any hotel promotional literature or information in my room. And no tv channel listing the day’s events and meetings. I found the meeting room for the symposium only by luck.
While, for me, Resorts was an improvement over the Sheraton, I would prefer that the symposium return to Caesar’s or Bally’s, or maybe change to the Tropicana.
One other odd thing about my stay at Resorts. The advertised “conference rate” was $79.00 per night (of course this did not include the various taxes and fees). However I booked my room online a few weeks before the symposium for $59.00 per night (plus taxes, etc). The room was clean and comfortable and well located.
So a word of advice - before booking a hotel for a seminar or conference at the "conference rate" go online, either directly to the hotel or to a booking site like Expedia or Hotels.com, and see what rate you are given. The "special" conference rate may not always be the best.
Enough about the venues – on to the class content. I will list some of the items of interest from each day.
The first day was devoted to the topic “Starting and Liquidating a Business”.
· The text referenced a special IRS Audit Technique Guide titled “IRC Section 183: Activities Not Engaged in For Profit” that can be downloaded at the IRS website. The IRS uses this guide in audits to determine if an activity is a hobby or a business.
· We were reminded that owners of a one-person LLC should not pay his/her personal bills from the LLC checking account.
· I learned of Form 8881 “Credit for Small Business Employer Pension Plan Startup Costs”, used to claim an annual credit for 50%, up to a $500 maximum, of the first 3 years of costs to set up and administer an employer plan.
· When it comes to selling your business via an asset sale, and not a sale of the corporate stock, it is much “more better” to be a sub-S corporation than a regular C corporation. This is a factor to consider when starting a business.
The second day was the annual 1040 update class “The Essential 1040”, which reviewed what is new for the federal Form 1040 for 2013, and included the obligatory, but time-wasting, 2 hours of ethics preaching. This is always the best attended of the three days of the symposium, and the room was truly “chock-a-block. But the total attendance seemed to me to be less than the past few years – possibly because mandatory CPE is no longer required of “previously unenrolled” preparers due to the death of the IRS’s RTRP program.
· In order to claim an above-the-line adjustment to income for tuition and fees the parent of a dependent college student must actually pay the tuition and fees. When it comes to the American Opportunity Credit it does not matter who pays the tuition and other allowable expenses.
· We were reminded that the Form 1098-T as it is currently prepared by educational institutions is truly the equivalent of tits on a bull – totally useless!
· When it comes to the additional .9% Medicare Tax net gains from self-employment will increase the amount of income subject to tax, but self-employment losses do not reduce wage income subject to the tax.
· Even a so-called “simplified method” for claiming a tax deduction, like the new safe harbor home office deduction, adds more complexity to the Tax Code and more work for tax pros. Tax preparers must now calculate the deduction under both the safe harbor and the actual expense method and determine which will provide the greater tax benefit.
· The calculation of the “Obamacare” penalty for not having health insurance coverage, which begins in 2014, is a convoluted mucking fess that also unnecessarily creates more work for the tax preparer. Obamacare should not be administered by the IRS through the Tax Code! In listening to the explanation of the penalty calculation I became even more convinced that the idiots in Congress do not actually read the legislation they vote on.
On the third day we went “Beyond the 1040”, discussing casualty and theft losses, “delinquent” taxpayers, and selected Schedule C issues. "
· The amount you can deduct as a casualty loss is the lower of the cost basis or the reduction in the fair market value of the item damaged and not the replacement cost. The cost of repairs to bring a home back to the same condition it was in before the damage occurred is an appropriate measure of the reduction in the fair market value of the home and can be used to determine the amount allowed as a casualty loss deduction.
· Do not prepare and submit for processing a Form 1040X in response to a change proposed on an IRS CP2000 notice.
· The IRS acknowledges that 40% of all CP2000 notices are wrong. From my experience the reality is more like 80%!
As usual the NATP presenter, a new one to me from Kentucky, was good, covering the contents of the workbooks thoroughly and adequately. And the workbooks had lots of examples and resourced.
FYI, I earned 24 hours of CPE credit at the symposium, which, added to the 12 hours I will earn at NJ chapter offerings this year, is more than double the 15 hours that had been required under the RTRP program.
And, by the way, I did not lose anyting in the casino. Because I did not play – not even slots. You gotta be in it to lose it.